Outsourcing of lottery marketing not a good idea

Thursday, October 4, 2012 - 12:01 am

The state is seeking even more suckers it can exploit

Indiana’s lottery commission has come up with a dubious plan. Its members voted 3-0 this week to hire a private company to take over its marketing and other services in hopes that the move will boost the lottery’s profits. Private companies already handle 88 percent of lottery operations, and this outsourcing proposal will boost that number to 95 percent.

There is nothing wrong in general with outsourcing or privatizing a government service. But the rule of thumb should be that if a service is valuable, it should be “hired out” if that would result in the same or better service provided more efficiently or less expensively or both. Such a standard could result in, say, the leasing of the toll road.

Outsourcing the lottery is on a whole different level because the lottery is not valuable service. It is, in fact, a sordid little enterprise in which the state exploits one of its citizens’ moral weaknesses. The lottery sells the false dream of easy riches, a 1-in-12 million gamble that indeed amounts to a “tax on the stupid.”

Letting the state budget become so dependent on the lottery was always a bad idea, and not just for moral reasons. Gambling is the definition of “discretionary spending,” and people are only going to spend so much on it. With more and more competition from casinos in Indiana and surrounding states, the less-exciting lottery is going to suffer.

The sane thing to do would be to be become less dependent on all forms of gambling revenue, by seeking a logical replacement (and looking for spending cuts, too, of course). But the lottery commission is going in the opposite direction. Hoosier Lottery Director Karl Browning said the goal is to increase the current $188 million a year in proceeds by $100 million by, among other things, “broadening the player base.”

Translation: We aren’t exploiting enough suckers, so we have to persuade even more Hoosiers to throw away their hard-earned money on a fool’s dream.

It’s one thing for a state to profit from vices people already have – taxes on cigarettes and alcohol, for example. It’s another to not only exploit a vice but actively seek to seduce people into giving into it. What moral authority does the state then have when it seeks to promote civic responsibility in its citizens?